Frank
With the KBOOT HID composite included the PC will need the Kboot *.inf file in order to install the driver.
This is only available if you have installed the KBOOT GUI on the PC, otherwise the USB will not be able to work.
The USB-MSD mode alone doesn't need a driver so removing the USB-HID (and KBOOT) was the fix.
Check out this for details about using Teensy Arduino projects together with the serial loader:
http://www.utasker.com/forum/index.php?topic=1869.msg6789#msg6789 (there are also some general details in the appendix to the serial loader's user's manual)
When you build the project, check the HEX file output because you can then see the addresses that it uses (in first line), and verify that it is really 0x8080, after which you can convert it to binary.
Ref.
:08808000FCFF0220552E0100570x8080 is the start offset.
FCFF0220 - converted to big-endian = 0x2002fffc - this is the initial stack ponter value
552E0100 - coverted to big-endian = 0x0001e255 - this is the address of the first instruction to be executed
These are taken from a K64 project (with more RAM) but you can check them for validity since the SP address must be as expected (at least somewhere in the available RAM address range) and the start address must also be as expected (at least in the valid Flash address range).
If they are invalid the serial loader will ignore the content, which explains why you don't see the software if it wasn't correctly prepared.
Regards
Mark